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Britain’s changing pension attitudes


Britain’s changing pension attitudes

In years gone by, you could quite easily forget about your pension; you don’t need it yet, so why bother thinking about it? This risky attitude could lead to you being financially unprepared for your retirement.

However, we’ve witnessed a shift in Britain’s attitudes towards personal pensions, a result of the launch of auto-enrolment schemes, increased media coverage and a growing awareness of retirement.

For example, the number of employers enrolled in a workplace pension scheme reached 598,000 last year. Overall, this contributed £87.1 billion collectively over the 12-month period, according to True Potential Investor’s Tackling The Savings Gap Consumer Savings and Debt Data Q2 2017 report. With the popularity of personal pensions continuing, it’s clear to see that Britain is certainly more aware of their pension responsibilities.

Findings from the Q3 2017 edition of True Potential Investor’s report show the impact that our other financial commitments are having on our ability to contribute to our pensions. During the quarter, 45% of survey respondents failed to make a pension contribution; this was most common in 45 to 54 year-olds (47%). 18 to 24 year-olds had the second largest proportion of people who failed to contribute (44%).

The above makes particularly interesting reading when you consider it in-line with other findings in the report. It found that a third of its respondents worry about money on a daily basis, while 37% admitted to lying about their debt. Perhaps then it’s not because of a lack of awareness; it may be because their financial situation simply won’t allow them to make a contribution.

During Q3 2017, those who made a contribution to their pensions added an average of £203. In contrast, the average amount of debt taken on by UK consumers each month stood at £370 — significantly higher than the amount put towards their pensions.

Overall, the Q3 2017 report found that Brits spend £143 on average per month on purchases they later regret, such as food, clothes and alcohol. If this money was invested in a pension instead for the full span from age 30 to 65, it could translate into almost £320,000. Based on the fact that Brits believe they will need £23,000 annually to live comfortably in retirement, this amount would be enough to fund 13 years of retirement.

This £143 average spend equates to £4.70 a day. As the above example shows, investing this amount instead could lead to a substantial pension pot in retirement. As such, we shouldn’t underestimate the impact that small yet regular contributions can have. This underlines the importance of better financial management to allow us the capacity to add such funds to our pension pots.

So how much will you need to live comfortably in retirement? The Saving For Retirement: How Much Will You Need? quiz created by True Potential Investor asks a few simple questions to establish how much you could need to live your desired lifestyle in retirement. Find out for yourself and take the quiz today.

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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